A couple who ran a lettings agency have been jailed for a total of seven years after stealing over £400,000.
The case begs the question as to how much more evidence the Government needs in order to make Client Money Protection insurance mandatory.
The agency, Williams & Young, in Sutton Coldfield, is said on one online business directory to be a member of ARLA, NFOPP and NALS. However. we are checking these memberships.
Amy Williams, 28, received four and a half years in prison at Birmingham Crown Court. She had earlier pleaded guilty to 26 offences of theft and fraud.
She was also disqualified from being a director for seven years.
Glen Austin, 46, her boyfriend at the time, was jailed for two and a half years after pleading guilty to theft.
Both had been prosecuted by Birmingham City Council after its Trading Standard team received numerous complaints from landlords and tenants.
Between May 1, 2013, and July 17, 2015, Williams syphoned off more than £408,800 from the company’s account, and paid it into Austin’s bank account.
During this period Austin, who had a gambling habit, placed bets of over £600,000 with Ladbrokes.
When company funds began to run low, Williams started defrauding tenants directly, taking deposits and advance rent.
She also took money from different people for the same properties. After pocketing deposits and advance rent, people were simply left homeless.
Ben Mills, prosecuting, said: “They never got their tenancy and had nowhere to live.”
In one case involving a city centre flat, 12 unsuspecting victims were defrauded.
Nine landlords were also “systematically defrauded”.
Sentencing, Judge Philip Parker said that both tenants and landlords were left in an impossible position. Prospective tenants who had been conned out of their money and had nowhere to live had suffered “massive” stress.
Chris Neville, head of Trading Standards for Birmingham City Council, said: “This fraud was not only heartless, leaving landlords and tenants out of pocket, but it was foolish – using company funds to finance a string of bets to raise more money.
“Tenants paid deposits and advance rents to Williams & Young in good faith, and in some cases landlords were unaware this was the case as the money had not been passed on.
“This court action shows we will pursue and prosecute those unscrupulous individuals responsible, and I welcome the judge’s ruling in this case.”
The business, established in 2007, apparently handled lettings, management and sales.
It attracted a string of terrible reviews on allAgents.
As the law currently stands, there is nothing to stop the pair from returning to work in the lettings industry, or to set up as estate agents.
The case comes just days after an amendment to the Housing and Planning Bill which will make it mandatory for letting agents to keep client money in separate accounts.
That same amendment could, should the Government subsequently decide, allow ministers to introduce mandatory Client Money Protection.
CMP is to be mandatory in Wales from November, when all agents will have to be licensed. They will not be able to get a licence without both PI and CMP insurance.
This month, EYE reported that a company called Whitefield Properties took rental money due to landlords and tenants’ deposits over a four-year period. The money was paid into the firm’s bank account and was, perhaps carelessly, not protected. It was reported that £123,000 of customers’ money went missing. The Staffordshire firm, with branches in Milton, Leek and Crewe, went into administration in 2014.
Agent who stole over £120,000 from clients walks free from court
Lord Monroe Palmer writes…The Government has back-pedalled and tenants have won
There is a letting agent in my area of the Cotswolds who is regularly withholding tenant rents from landlords and making false claims against tenants. He has even fraudulently withheld council benefits payments from a landlord. Despite being reported to the police, CAB, trading standards (2 counties) and the council housing department – nobody seems willing or able to take any action. You have to wonder if it’s actually worth complying with all this additional legislation if nobody is actually going to enforce it!
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bren_gun it took around six months of Landlords contacting Action Fraud, CAB, the Police etc… for CAB to eventually pass this case through to Birmingham Trading Standards, NFOPP/ARLA/TPO did nothing but pay out some compensation to some of the landlords and hold a tribunal http://www.nfopp-regulation.co.uk/media/1044219/x0054413-determination.pdf.
If these landlords hadn’t been able to contact the previous Director for assistance and put intouch with each other then I’m not sure justice would have ever been done, and they could have continued to carry out these frauds.
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Amy Williams was a member of NAEA and ARLA but her membership was terminated in January 2015. She was still a member whilst carrying out these frauds. The company was trading above board and legitimately up until 2014 with only good reviews from Landlords and Tenants, it was only after the main Director resigned and left for personal reasons at the end of 2013 that Amy Williams and Emma Williams were then left to run the business and things went bad from then on. The company had the correct designated client accounts, and client money protection to be members or NALS and ARLA, however, both the NFOPP and The Property Ombudsman, and at the beginning the police too, were of very little assistance to Landlords and Tenants that were having problems. It was only when the previous, Director was tracked down by some of the landlords that he assisted with advice and putting affected landlords in touch with each other so that they were able to then all join forces and get both Action Fraud and Trading Standards to see that this wasn’t just one or two landlords being affected. This case would never have got to court otherwise.
This case highlights the requirement for ARLA/NAEA/NALS to be able to step in and get involved sooner and to assist with bringing rogue agents to justice. None of these governing bodies had any input in this case.
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“She was still a member whilst carrying out these frauds.”
“The company had the correct designated client accounts, and client money protection to be members or NALS and ARLA, ”
So presumably the defrauded clients got their money back through the CMP insurance, then?
It would be interesting to know what happened.
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“The Client Money Protection (CMP) Scheme will compensate an applicant (Landlord, Tenant or Management Company) up to a limit of £25,000. However, landlords are limited to a maximum of three months’ rent”
Many landlords were missing more than 6 months rent, and claiming through CMP is all well and good as long as you are advised as a landlord or tenant that this is an option. Many of these landlords only had help or guidance almost a year after they started having problems, and this was from the previous Director once they’d made contact, therefore as claims have to be made within 12 months of the misappropriation occurring, many had already surpassed this. For others, the frauds happened after Amy/the company had their membership terminated.
There were more landlords that had been affected but some did manage to get compensation through the CMP scheme but were still left out of pocket.
For the deposits that were taken, they were protected with the TDS, however the TDS will only make claims payable to Tenants and not Landlords when paying through their insurance when agents disappear or go into liquidation.
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Ah yes, all the articles on the benefits of CMP insurance tend to be rather silent on these ‘slight’ restrictions…
And of course, insurance can lapse or be terminated.
How would making CMP mandatory by law improve this?
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Great point Romain.
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Pay the money, do as we ask and when it comes to needing help look elsewhere.
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Do you not think the NAEA and ARLA terminated her membership in order to lessen the association between them, “got rid of her just in time” don’t think so.
Why do they profess that you are dealing with a reputable agents if they are members of them?
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Requiring client money protection insurance by law is of no use if the law is not enforced.
Just look at the number of agents that are sill not publishing their tenant charges clearly on all property listings……
Laws without enforcement just makes life harder for the “good people” without effecting the “bad people” at all.
ARLA/NAEA/NALS have proved once again that they are not very effective when things start to go wrong with an agent.
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We moved away from industry self regulating bodies in the 1990’s, which did police its members in other industries but that right was taken away with government intervention to control being given over to government bodies that only act today after the horse has bolted. NO pro-active policing to call of … just email me back this questionnaire after you have had time to rig the reply!
Dishonesty is a mind set, no matter how qualified you are or not. The only way the industry can come clean is for active policing and the authorities “as is” haven’t the time, money, resources and lack of experience. I would happily pay to self regulate through a trade organisation that can be trusted. Would be far cheaper than paying all the annual fee’s to this and that licencing regime that is nothing more than bureaucracy.
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